Russia-Ukraine conflict fuels uncertainty to U.S. economic outlook: report

Gas prices are displayed at a gas station in Los Angeles County, California, the United States, on March 20, 2022. (Photo by Zeng Hui/Xinhua)

Economists are warning Americans to brace for another tumultuous year, filled with unknowns.

OTTAWA, March 21 (Xinhua) -- The Russia-Ukraine conflict which has roiled world energy prices and created a massive refugee crisis will slow growth and fuel uncertainty to U.S. economic outlook, the Boston Globe reported.

Kristalina Georgieva, managing director of the International Monetary Fund (IMF), said that "we got through a crisis like no other with the pandemic, and we are now in an even more shocking territory," according to the report on Saturday.

The IMF is likely to reduce its forecast for world economic growth because of the conflict, she said. Private analysts have cut their estimates of U.S. economic growth for this year, with investment bank Goldman Sachs recently lowering it to a sluggish 1.75 percent.

Moreover, the economic effects from COVID-19 are far from over. Possibly fueled by the highly transmissible Omicron subvariant BA.2, COVID-19 cases are rising in some European nations, the report said.

Consumers shop at a grocery store in Washington, D.C., the United States, March 10, 2022. U.S. (Photo by Ting Shen/Xinhua)

Douglas Holtz-Eakin, president of the American Action Forum, said he agreed with the U.S. central bank's plan for interest rate hikes to tamp down inflation and address Americans' fears that the price hikes are here to stay, which would likely only worsen the phenomenon. "The Biden administration should focus on ending the war in Ukraine and preparing for another spike in COVID cases," he said.

The combined effects of high inflation and rising interest rates will make this year difficult for consumers, economists said. Lawmakers also are floating ideas to try to ease some of the economic pain, including taxing high profits by oil companies to penalize price gouging and temporarily suspending the federal gas tax to lower prices at the pump, a move some states also are pursuing, according to the report.

Economists are warning Americans to brace for another tumultuous year, filled with unknowns, the report said.